Chinese Beer Production and Sales Expected to Decline in 2015

Tang Xiaotao’s stock of beer in his fridge has not gone down by much this summer, thanks to frequent rain that has been keeping the weather unusually cool. Customer behavior like his are what is keeping the beer industry worried, as sales have been slower this year because of the cool weather. David Zhang, senior drink analyst at Mintel Group Ltd, a market intelligence agency based in the United Kingdom, said the beer industry in China is facing saturation and the market is more easily affected by outside factors. For example, the cool weather is expected to have an impact on the beer industry this year…Full Article: China Daily July 2015

Key Point

According to a researcher with China Food Institute, Chinese beer consumption can generally be divided in two categories. The first is indoor consumption of high-end (pricier, higher quality) beers and the second is outdoor consumption of low-end (cheaper, lower quality) beers. The latter consumption category can be negatively impacted if the weather is particularly cool, prompting consumers to forgo consumption.

ChinaAg Comments

As of early 2015, five breweries had an 80% share of the beer market in China. These include Huarun Snow Beer Co Ltd, Tsingtao Brewery Co Ltd, Anheuser–Busch InBev (e.g. Budweiser), Beijing Yanjing Brewery, and the Carlsberg Group.

In 2014, China’s beer production declined (by 2.7%) for the first time in 24 years.

In November 2014, China National Radio noted that the country consumes 34.2 liters (~72 pints) of beer per capita annually.

In August 2014, Euromonitor International stated that Snow beer (operated by China Resources Enterprises) had a 21.7% market share in China, followed Tsingtao Brewery Co with 15.7%, Beijing Yanjing Brewery with 11.7%, Anheuser-Busch InBev at 11.4%, Henan Jinxing Brewery with 3.4%, and Carlsberg with 2.6%.

In 1998, China overtook Germany as the number two consumer of beer, and passed the United States as the top consumer in 2002.